Study On The Application Of The Balanced Scorecard In The Performance Evaluation Of A Local Commercial Bank

The financial industry is gradually becoming the lifeblood of acountry’s economy, and in this industry, commercial banks are playing animportant role. The sound development of local commercial banks, in turn,can also promote the progress of the industry. Recently, with the marketing ofinterest rate and the appearance of internet-finance have made commercialbanks booming. In order to survive and further develop in the fiercecompetition, commercial banks must strengthen their management andimprove the existing performance evaluation system. Previous performanceevaluation system mainly focused on financial indicators without consideringthe external environment and its strategic needs. And now this system can nolonger adapts to the requirements of the complicated situation. The balancedscorecard performance evaluation system is one of the improvements. It notonly connects the performance and strategy but also has very strongmaneuverability.In this paper, the author first elaborates on the research purpose,significance based on the severe situation commercial banks are facing:changing the previous performance evaluation system into one that is suitablefor evaluating the development of local commercial banks. Research methodslike documentation study, systematic analysis and case study are adopted inthis study. Next, the paper introduces relevant theories of the balancedscorecard and reviews previous research on the performance evaluation ofcommercial banks both at home and abroad. Thirdly, by comparing theperformance evaluation methods in China and foreign countries, the author analyzes the characteristics of domestic local commercial banks andemphasizes the necessity of introducing the Balanced Scorecard to localcommercial banks. The paper takes A Commercial Bank as the example toreveal how the balanced scorecard evaluation system works in realizing thebank’s strategic goals and in determining the weight of each index via theAHP analysis method. Meanwhile, the paper also points out the safeguards forthe performance evaluation system in A Commercial Bank. Finally, the paperpoints out the application value of the balanced scorecard system and itssignificance in enhancing the sound development ofACommercial Bank.